Update − Euro up slightly, awaiting ECB views on quantitative easing

Economic Calendar

Market Update

• Nikkei average gained 4.1 percent on Thursday as automakers surged on growing optimism about the U.S. economy after a string of better data than expected.
• Hong Kong's Hang Seng index jumped 4 percent, with HSBC leading the gauge up nearly 7 percent.
• Stocks rallied, driving the MSCI World Index higher for a third day
• Treasuries and the yen declined as the Group of 20 met amid growing speculation that the worst of the global recession is over.

News Summary

• The European Central Bank may cut its key interest rate to a record low of 1 percent today, increasing pressure on policy makers to use new tools to fight the worst recession in more than 60 years.
• World leaders will strive to reach an agreement on how to confront the worst global financial crisis since the 1930s at the G20 summit in London, amid signs that the world economy is stabilizing after months of freefall.
• Stocks climbed on Wednesday as factory activity in March fell at a slower rate than the month before, while pending home sales rose more than expected in February, sparking a broad advance.
• Timothy Geithner said global economies are showing “traction” amid widening stimulus efforts. Geithner’s remarks reflect the view of some analysts that the worst of the economic downturn may be past, even as some banks are likely to fail and unemployment is set to worsen.
• U.S. auto sales fell 37 percent in March, a smaller-than-expected drop that encouraged hope that the world's largest car market is nearing a bottom after a freefall that has pulled the industry into a deepening crisis. Toyota's U.S. sales fell less than analysts predicted last month as the world’s largest carmaker offered near-record incentives to spur demand.
• Commercial property loans in default or foreclosure grew in the first quarter as the U.S. recession cut occupancies and the credit crisis stymied refinancing.
• Companies in the U.S. cut an estimated 742,000 workers in March, pointing to no relief in sight for the labor market amid the longest recession in seven decades, a private report based on payroll data showed yesterday.
• Although the U.S. economy is expected return to growth later this year, there is a danger of a second recession if monetary easing and a weak dollar leads to increased inflation expectations, a report said on Wednesday.
• Changes to General Motors Corp's contract with the United Auto Workers union could save the automaker $1.1 billion or more in hourly labor costs, GM said in a report to the U.S. Treasury released on Wednesday.
• The UK manufacturing sector declined at a slower pace in March, adding to signs that the recession may be near its deepest point, data published on Wednesday suggested.
• China’s leaders, increasingly concerned about the nation’s $740 billion of U.S. Treasuries, are making it easier for trading partners and consumers to do business in yuan.